Suzlon sells Senvion to US-based Centerbridge for Rs 7200 cr

Suzlon Group, one of the world’s leading wind turbine manufacturers, has signed a binding agreement with Centerbridge Partners LP, USA to sell 100% stake in Senvion SE, a wholly owned subsidiary of the Suzlon Group, for Euro 1 billion (approximately Rs 7,200 crores). The transaction, which is subject to regulatory and other customary closing conditions, has a future earning potential of up to an additional euro 50 million (Rs 360 crore).
 
As per the deal, Senvion will give Suzlon license for off-shore technologies for the Indian market, while Suzlon will give Senvion the S111-2.1 MW license for the US market. The 100% stake sale of Senvion SE is in line with Suzlon’s strategy to reduce the debt and focus on the home market and high growth market like USA and emerging markets like China, Brazil, South Africa, Turkey and Mexico. The transaction is expected to be closed before the end of the current financial year.
 
Tulsi Tanti, Chairman, Suzlon Group, said, “We are pleased to announce this development which is in line with our strategic initiative to strengthen our balance sheet. The proceeds would be used for debt repayment thereby reducing interest cost and augment business growth.”
 
In 2013-14, Suzlon paid Rs 2,000 crore in interest and posted a consolidated loss of Rs 3,500 crore. Senvion contributed Rs 13,759 crore, or 65 per cent, of Suzlon’s Rs 20,402 crore of consolidated revenue; the sale will shrink Suzlon’s size by half.
 
The Indian government‘s significant thrust on renewable energy offers a conducive policy framework to the sector which Suzlon is best equipped to capitalise. “We will focus on high growth markets like India, USA and other emerging economy markets. Suzlon will offer its wind and solar hybrid technology solutions to contribute towards achieving country’s target of ‘sustainable energy for all’,” said Tanti.
 
Stefan Kowski, managing director at Centerbridge, said, “Senvion is a company with impressive technology and leading market positions. The global market environment for renewable energies is promising for a wind turbine manufacturer, particularly for one of the most experienced players in the industry with onshore and offshore capability. We are confident that Senvion will continue its track record and, together with the company’s management, we look forward to supporting its continued development as a profitable and growing company.”